The commercial industrial biotechnology manufacturing facility in Moema, Brazil, belonging to renewable oils manufacturer Solazyme (NASDAQ: SZYM) and its feedstock partner Bunge (NYSE: BG) .has finally begun operations and will reach its annual nameplate capacity of 100,000 metric tons in 12 to 18 months. We recently looked at supporting infrastructure and upstream systems in the first half of this four-part series. In part three we'll look at the equipment supporting the hands-down favorite process: fermentation. I'll cover the actual process of fermentation in an article in the near future.

As we have learned, the equipment and processes supporting an industrial biotech platform are vastly complex and often overlooked. It certainly behooves investors to at least loosely familiarize themselves with the critical moving parts of such a facility, because it only takes one failing system to result in a delay. Of course, this was witnessed firsthand at the company's commercial facility in Moema, with management citing "intermittent utilities" for the reason fermentation batches failed, albeit through multiple, fragmented disclosures. Generators are now in place to smooth out disruptions to the supply of power, meaning fermentation should be able to proceed uninterrupted (assuming intermittent utilities were the culprit).

Source: Solazyme.

Russian dolls of industrial biotechThe industrial fermentation process utilized by Solazyme and Bunge is hands-down the most critical part of the heterotrophic algae platform. However, it's not as easy as taking a swab of algae from a petri dish and tossing it into an 80-foot tall, 625,000-liter fermenter (also called the production fermenter). To reach the final volume of bioreactor (also called fermenter) at any facility, engineers must first grow cells in a series of bioreactors called the seed train. The purpose of the seed train is to grow cells to an appropriate concentration for transfer to the production bioreactors with minimal stress on the cells and optimal scheduling for the facility.

While it varies by facility and host organism, seed trains typically consist of bioreactors that increase in volume by a factor of 10. Let's consider the fermentation process for producing a soleum high oleic oil as an example. Solazyme takes the commercial strain responsible for production and transfers it to a 125-liter bioreactor. Once the cell concentration reaches a predetermined level, the entire volume of the 125-liter bioreactor is transferred into the next vessel in the seed train, which has a volume of about 1,250 liters. The process is repeated until the same cell concentration is reached in the final bioreactor in the seed train, or 125,000 liters at Moema, before finally being transferred into the production bioreactors weighing in at 625,000 liters. It's amazing to think that the final vessel of the seed train at Moema has the same volume as the production bioreactors at Solazyme's demonstration facility in Peoria, Illinois!

The seed trains allow Solazyme and Bunge to begin each commercial batch at a cell concentration that optimizes production costs and process scheduling because they operate independently from the production bioreactors. In other words, a seed train begins before a production bioreactor has completed its previous batch or has been cleaned, which saves precious time for each production run. Remember, the larger the volume, the longer it takes for fermentation to be completed. Batches at 625,000 liters might take 20 days instead of 14 from start to finish without the seed train. Six days may seem like a minor difference, but it adds up across four production bioreactors operating over an entire year. In fact, for the preceding scenario, the difference could equate to 15 million liters of product each year!

It's important to remember that the goal of the seed train is not to produce product, but instead to produce algae.

Process scheduling is keyOne of the key parts of the ramp-up at Moema is optimizing the process scheduling. Two seed trains could supply cells for four production bioreactors if staggered correctly, which saves time and money (fewer vessels, piping, and space required). However, production is even more complex for an industrial biotech company such as Solazyme, which produces multiple products from the same facility. Soleum high oleic oils may require 14 days of fermentation, but Encapso lubricants may only take 12 days per batch. Minor discrepancies such as that can easily throw a tidy, staggered schedule out of whack. It's a unique challenge that will have to be answered with a creative solution unique to Solazyme's platform.

Of course, minor discrepancies work both ways and can really add up with improved strain engineering. For instance, at the time of its IPO, Solazyme believed it needed to scale fermentation to 750,000 liters to reach economic production. Now it has targeted 625,000-liter fermenters -- such as the ones being utilized at Moema, although Clinton, Iowa, utilizes 500,000-liter fermenters -- to reach optimal production. Improvements in microbial productivity have likely made the largest contribution to the revision. I'll explain the process and production metrics for investors in a separate article in the near future, but consider the following graphic of the ramp-up schedule. The production curve continues to rise once nameplate capacity is reached solely through process improvements.

No, the bioreactors aren't growing, but the algae are becoming more efficient. Source: Solazyme.

Foolish bottom lineFermentation processes at Moema use much of the same equipment that's utilized throughout the brewing and pharmaceutical industries, but the process is more complicated. The facility is much larger and produces more diverse products than anything preceding it -- that's the major difference for all next-generation industrial biotech platforms -- which makes process scheduling more challenging. Nonetheless, Solazyme investors should have a better understanding of what's involved with fermentation equipment. For the next and final part of this series, we'll look at the recovery of product downstream.

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